Obama Administration Breaks Law to Enrich Health Insurers
The Obama administration will tell any lie and break any law to prevent the president’s signature health program from collapsing. Insurance companies, such as UnitedHealthcare and Aetna, are losing billions trying to sell Obamacare plans, and the risk is they’ll drop out at the end of 2016. No insurance companies means no Obamacare. In 2014, the White House tried to avert that disaster by promising insurers a bailout funded with taxpayer dollars, but public outrage and quick action by Senator Marco Rubio put a stop to it. Now the administration is at it again.
Desperate to keep insurers on board, the administration scrambled to find another source of money. Unfortunately, a big part of that money pot belongs to the public. Disregarding that fact, the administration announced on Feb. 12 that the money will be handed out to insurers — a whopping $7.7 billion this year alone. That huge handout to the insurance industry violates the law.
This is money you and everyone else who already has insurance is forced to pay, called a reinsurance fee. You pay the fee whether you buy your own plan or get covered at work, even if your employer self-insures. You may be clueless about it, but the fee is buried in your premium or taken out of your compensation.
The language of section 1341 of the Affordable Care Act, which details what this money can be used for, is clear as a bell. Some of these annual fees — adding up to billions a year — belong to the public, not the insurance companies. The law states a fixed share “shall be deposited into the general fund of the Treasury of the United States and may not be used” to offset insurance companies’ losses. But the administration gave all of it to the insurance companies last year, and got away with that heist. So they’re trying it again.
Anyone in the corporate world who misused funds that way would be headed to prison. This rogue administration is going to any length — including running afoul of the law — to keep insurers hooked into Obamacare.
In the words of University of Houston law professor Seth Chandler, who tried to call attention to the crime several months ago, this is an illegal “diversion of funds to enrich insurers.” Last year alone, Cross Blue Shield of Texas got $549 million of these reinsurance funds, while Anthem Blue Cross of California got $401 million.
How did this fly under the radar last year? Because no one — especially members of Congress — has read the law. Insurance companies weren’t about to object to getting more money than the law allows. Plus, the announcements of these payments were buried in mind-numbing federal agency releases. The latest such disclosure came late on the Friday of a holiday weekend. The business press reported the announcement but didn’t go back to read section 1341 of the law and find that the payouts are illegal.
Last week, a few health scholars took notice, including Doug Badger, senior fellow at the Galen Institute. He says the illegal maneuver is “designed to keep a sinking ship from hitting rock bottom.”
Congress should step in immediately and exercise its oversight duties to stop this looting. The next payments to insurers are promised for March. No time to waste.
Obamacare was sold on lies: You can keep your health plan if you like it. And you can keep your doctor if you like your doctor. Then, once it was passed, the administration resorted to a long string of lawless executive actions to keep an unworkable scheme going, despite the damage being done to employers, doctors and consumers.
The administration’s diversion of public funds to its insurance company cronies is just the latest defiance of the law. The president has illegally delayed the employer mandate repeatedly. He’s handing out free Obamacare plans to illegal immigrants. Statutory deadlines are routinely ignored, and funds are slyly shifted from one program to another — the law be damned.
Ultimately, Obamacare is imperiling not only our health and our nation’s economic growth, but also our nation’s most precious asset — the rule of law.
Betsy McCaughey is a senior fellow at the London Center for Policy Research and author of “Government by Choice: Inventing the United States Constitution.”